Fewer Americans using credit cards for the holidays

In yet another sign that Americans are still cautious -- and growing more so -- about their spending, new research shows that fewer of us will be using credit cards to make our holiday purchases this year.

According to a survey conducted by BIGresearch for the National Retail Federation (as reported here by Reuters), the number of consumers using credit cards for holiday purchases will drop more than 10% this year. Only 28.3% of shoppers say they'll use credit cards to buy presents, down from 31.5% last year.

What are we doing instead? Paying cash. The number of survey respondents who said they'll be using cash to buy holiday gift this year rose by almost exactly the same percentage as the drop in credit-card users, at 9.1%. This is a step in the right direction for consumers, as more of us are making a conscious decision to live within our means.

It's bad news for the already-beleaguered credit-card industry, though; we've recently written about new data showing that credit-card companies will probably have many more defaults next year.

It's also bad news for the nation's retailers, which are already bracing for a weak holiday shopping season. The National Retail Federation survey also revealed that we're buying more practical gifts this year. A greater percentage of consumers plan to buy clothing this year, and fewer are buying electronics and jewelry.

Why are Americans shunning their credit cards as they prepare to celebrate the winter holidays? A variety of reasons. For starters, the employment rate of more than 10 % means many of us are using our financial cushion for necessities, not presents. The weak housing market means no one's tapping into rising home equity for a loan. Finally, the tight credit market means many credit-card issuers have lowered consumers' credit limits. In the grand scheme of things, maybe having less access to credit we might have a tough time repaying is a better holiday gift than we realize.